After hiking rates six times in a year, the RBI has finally taken a small step towards boosting liquidity. Its mid-quarter review on Thursday left policy rates unchanged. It also reduced the statutory liquidity ratio or SLR by one percentage point to 24%. The SLR is the percentage of money banks have to invest in government bonds. Meanwhile, the RBI also announced it would buy back bonds worth $10.6 billion.
On the second day of his visit to India, Chinese Premier Wen Jiabao said he believed India and China would be able to take their cooperation to a new level in the coming years. A joint communiqué meanwhile indicated the Chinese side might be open to India becoming a permanent member of the UN Security Council. It also said the two countries would aim to expand their trade to $100 billion by 2015.
Despite the bonhomie, the two sides also had tot tackle several outstanding issues. They agreed to cut the current trade imbalance by supporting Indian exports. Meanwhile foreign secretary Nirupama Rao said the Chinese side took the issue of stapled visas for Kashmiris very seriously. She added that India had also taken up its concerns about terrorism from Pakistan during the discussions.
And the Hero Honda joint venture has come to an end. On Thursday the Hero Group announced it would buy out Honda Motor’s full 26% stake in their joint venture. Honda’s stake in motorcycle company Hero Honda is currently worth about $2 billion. Thursday’s announcement will allow Honda Motor to pursue opportunities in the Indian market by itself. The Munjal family, which controls the Hero Group, also currently owns 26% of Hero Honda.
Stocks of Hero Honda finished 3.57% higher on the BSE on Thursday at 1,679.10.